Even once reliable news sources now publish falsehoods to promote narratives

The latest is U.S. claims that its semiconductor industry is world leading

China demonstrated a 3nm chip in 2019. South Korean Samsung beat China in that advance. The latest iPhone uses a 3nm chip - developed not by Intel (INTC) but by Taiwan Semiconductor Manufacturing (TSM), part of China in China’s eyes and likely in fact over time. Yet Bloomberg, a once reliable news source, now claims that China lags behind the U.S. in semiconductor technology and only grudgingly admits that China is “catching up” despite sanctions imposed by the U.S. Bloomberg’s article includes a useful chart showing the progress in reducing the semiconductor process to the current state-of-the-art 3nm. The chart shows where these chips are used but not where they are produced.

It is not the Chinese who are lagging, but once industry leading Intel who touts its current 10 nm process node and claims it is moving back into a leadership position over the next few years. I have no doubt that Intel has formidable technical skills and will succeed in its plans for a 4nm and 3nm process, but that will await its demonstration of a 7nm process at scale, something yet to be accomplished.

It is popular among U.S. politicians on both sides of the aisle to claim that the U.S. has world leading technology and in many areas it does, but in the vitally important semiconductor industry, outsourcing by Apple and other giants to Taiwan Semiconductor Manufacturing and outsourcing design to ARM Holdings (ARM) have put the U.S. in the back seat, not the driver’s seat, and sanctions and wishes have not stemmed progress by its rivals. If wishes were horses, beggars would ride.

A lot of capital is now going into U.S. domestic semiconductor fabs as the country starts to onshore its own needs and lessen dependence on offshore designs and fabs but that process will take time and when behemoths like Apple and NVidia (NVDA) depend on technology from abroad to sustain their respective industry positions, the process will be difficult and delayed by commercial realities and quarterly earnings hopes.

Industry watchers may have to rely on foreign news sources to get the truth of this key rivalry since it seems clear that they won’t get it from U.S. mainstream media. Years of “woke” distractions, ESG promotion and reliance on global outsourcing have weakened U.S. technology giants long term while benefiting their short term profits and the chickens will come home to roost in time. That time may be now. It is a mistake to underestimate Huawei or Samsung or TSM.